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Mt. Gox Files for Bankruptcy; What's Next for Bitcoin?

2/28/2014 11:37AM

Bitcoin exchange Mt. Gox said it was filing for bankruptcy protection and that 750,000 of its customers' bitcoins had been lost. Is the end of the crypto-currency or merely growing pains? Columbia Business School assistant professor Moshe Cohen discusses on MoneyBeat.

This transcript has been automatically generated and may not be 100% accurate.

I ... in mm mm mm ... bitcoin exchange and our doc said it was filing for ... bankruptcy protection ... and at seven hundred and fifty thousand of its customers bake ones ... and why ... the dollar ... had been lost ... and as I got as what is this the end of the UN currency on the league and growing pains joining us to discuss what's next for bitcoins Columbia Business School assistant profession professor ... Moshe Cohen ... before I as destructive ... Korea pepper you on this but it ... doesn't tell the Wall we know exactly Paul puts on not ... overnight overnight New York Times on mascots filed for bankruptcy protection ... they said they'll press covers they said that ... about seven hundred and fifty thousand equivalent of customers were lost ... on worth abruptly depending on whether GM Ford and seventy three million a day at sixty three million in outstanding debt the website went down October twenty Fifth he'd never came back and I guess ... the question is ... on more than is it ever going to come back what does this mean for bitcoin the question that I ... did the work I keep seeing attached to this is existential YouTube is an existential crisis for my point I think a good way to think about bitcoin is bitcoin is now a robotic surgery ... that can take the place of of of surgeons ... so ... you know absolutely if I told you that there is now technology where robots can perform precise surgery you will adopt to do that in place of maybe some really old surgeon was shaking hands but ... you want a doctor to be there because the programming of the robot may be in perfect there may be problems that can come up ... I knew I wanted to be in hospital ... right ... aam in the case of bitcoin and this is sort of the robotic technology has developed but ... there's been a sordid little oversight ... I'm assuming in public ... but there's been little supervision and so it's it's an expected development is an existential crisis began ... back to the analogy ... this robotic technology is so powerful we're not can it ... turn our heads in and can give up on it because it was an implemented the right way either by the upsurge in implementing it for the technology itself so I tend to agree I think that the Proms now Gotshal and being a email ... to see this isn't ... this is not only is the Lehman Brothers systemic races to think what ... this is the big question ... not all of the will of the twenty minutes the people into the ladies know Silk Road drug traffickers and now they know as an exchange Ecolab for whatever reason to what is is due to the reputation of the close of this is an opportunity it's it's kind of ... its own dramatic this is an opportunity lot of people lost a lot of money that's very unfortunate an opportunity to be taken in two directions ... competing exchanges for bitcoin believers ... we use this as as a pity we use this and represent this as part of the learning process to develop a better product ... will be a better blend of some verification and supervision in the new implementations ... and I'll say that this is sort of a painful but and costly part of the learning process ... there's also an opportunity for complete alternatives there's lots of competition to bitcoin ... but the key thing to note is if you're competing with a first mover that has a first mover advantage and a network effect you have to offer a differentiated product you have to offer something that is significantly different ... here's a place where people can come and if other exchanges other ... currencies or other technologies can provide better assurances ... then there's an opportunity for real competition in the toss and alternative currencies like the old name calling Dogecoin ... TPG consequences that I mean that ... I think the problem with the I don't mean the problem with with with these other technologies is that began ... open source for the crypto up up for the mathematical algorithms but there isn't sufficient differentiation they're talking about some difference is in my name right but where do people really wanna see ... differentiation we want some assurances this'll either come in the form of the ... clients the wallets now are taking more verification aam aam measures ... the exchanges particularly people of larger accounts there are taking more measures ... if you wanna introduce a new system for an alternative for this digital transfer technology ... there's a place to start ... and that's only a stop ... motion Cullen things come in and take on the things you very much appreciated things are happening ...